Seat 2B By Joe Brancatelli
Hotels Chains Create an Existential Crisis
April 23, 2015 -- Can a hotel still be an independent property if it joins a lodging brand? Can a gigantic hotel company have a chain comprised of independents? Can it be a "brand" if all the hotels maintain their own names and identities?

Those are a lot of existential lodging questions for weary business travelers, especially since most of us are just looking to put our head on a bed. And, believe me, it'd be a bad day for Albert Camus if your humble scribe were to spend too much time splashing around the deep end of the existential literary pool.

But the hotel business, already bursting with chains and lodging concepts, has lately become an existential exercise. too. Big hotel companies are feverishly creating what they call "soft" brands, existential conundrums that nevertheless make a lot of sense for us, the lodging chains and the world's independent hotels.

You may have already come in contact with a "soft" brand. Starwood created the category 20 years ago with the Luxury Collection. Marriott calls its invention the Autograph Collection. If you haven't stumbled upon one, you certainly will soon. Starwood introduced another soft brand (Tribute Portfolio) last week and Hilton (Curio Collection) and Carlson Rezidor (Quorvous Collection) introduced their versions last year. Loews Hotels says it'll have one next year and Hyatt has been mulling a soft brand for several years.

What in the name of Nietzsche is a "soft" brand? How will it impact how we book lodgings? And do we really need more hotel brands? Let me try to explain as prosaically as possible.

The largest hotel companies--Marriott, Hilton, Choice and Wyndham of the United States, Accor of France and InterContinental of Britain--collectively represent around 30,000 hotels. The second tier--Starwood, Hyatt, Carlson--add perhaps 3,000 more. Throw in other, smaller brands and you're pushing the total to about 40,000. That's a sliver of the global lodging pie. In fact,, an online travel agency (OTA), claims it lists more than 200,000 hotels. So back-of-the-envelope math suggests that only one in five traditional hotels on the planet fly a recognizable brand flag.

The problem facing unaffiliated and unbranded independents: How do they convince us to book with them? If we're tied to a frequent guest plan, we probably won't since we won't get our points or have our elite status recognized. For less points-obsessed travelers, however, OTAs such as and are the solution.

The trouble with OTAs? They charge hotels a frightful amount for the service, around 20 percent of the nightly rate.

Alternately, independent hotels could give up their independence, join a chain and change their name to a brand sponsored by one of the lodging giants. That lowers the cost of acquiring guests--chains take 10-14 percent off the top--and allows them to pursue points-obsessed business travelers, too.

But going into a chain as a full-fledged franchise--be it a full-service brand such as Marriott or Westin or a limited-service operation such as Hilton Garden Inn or Holiday Inn Express--isn't easy. It might take substantial and costly renovations of lobbies, bathrooms and ballrooms. It also imposes a rigid set of operating standards. Besides, many independents value their existing brand name and customer base and more than a few travelers prefer non-chain accommodations.

Now, finally, we come to the existential concept of the "soft" brand. Under pressure to grow, big lodging companies always need more brands and more chains and more "distribution," the industry jargon for their global footprint. Their newest solution is the "soft" brand, essentially independent hotels that agree to use the big lodging company's marketing and reservation systems and allow travelers to earn and burn points in the chain's frequency plan. Other than the rez system and the frequency plan, independents are free to, well, be independent. Affiliating with a soft brand is cheaper, too, since insiders say the big lodging companies only charge about 10 percent of the nightly rate.

This win-win-win scenario seems to be working. As you can see by the chart, existing soft brands are growing fast and new ones are coming online rapidly. Marriott's five-year-old Autograph Collection of properties such as the Algonquin Hotel in New York and the Mauna Kea Beach Resort on the Big Island of Hawaii has reached 93 hotels in 23 countries. That's essentially the size of Starwood's Luxury Collection. The Curio Collection from Hilton has 10 properties now and adds two in Jamaica later this year. The Astor Hotel in Paris, a market where Hilton is weak, joins Curio next year. Starwood's newly announced Triumph Collection launched with just one hotel, but the company expects to represent 100 independents within five years.

Soft brands can trace their lineage further back than the Luxury Collection, of course. Although they aren't brands hard or soft, Preferred Hotels and Leading Hotels provide reservation, promotional and marketing services for independent properties. The granddaddy of all "soft" brands is Best Western. All 4,000 properties are independent and free to maintain their own identities. Best Western, in fact, isn't a chain at all, but a marketing and reservation organization that dates to the 1940s.

Existential angst aside, the "soft brand" concept seems to have few drawbacks.

One in particular bugs hoteliers. "If you're paying 12 or 14 percent to be a branded franchise of a chain, you don't really like that the franchisor is selling the rez system and frequency program to a competition for 10 percent," one hotel executive tells me. "The chain continues to flood your market with competitors and all that does is makes it harder for you to fill your rooms."

A drawback that may resonate with business travelers: brand confusion. We're used to traditional branded chain hotels and we expect properties to look, act and operate in a predictable way. Even if they've wrapped themselves in a flag that says Curio or Autograph, independent hotels don't work that way. We're also going to have trouble telling the various soft brands apart. For one thing, almost all have the word "collection" in their name. And they all fall back on the same buzzwords in promotion and marketing. They all claim to be "curated" and populated with "individual" and "unique" hotels that have "character."

And no matter how much we'd like to ignore it, some independent hotels are having an existential crisis. Consider, for example, the Hotel Alex Johnson in Rapid City, South Dakota. It's probably best known because it was frequently mentioned in "North by Northwest," the classic 1959 Hitchcock thriller. In those days, however, it was called the Sheraton Johnson. It resumed its independent status and original name in 1965 when Sheraton sold the 143-room hotel. Several years ago, the Alex Johnson joined Choice's soft brand called the Ascend Collection. Now the hotel, named after the railroad magnate who built it in the 1920s, is defecting to Curio Collection, Hilton's soft brand.

Talk about remembrances of hotel affiliations past. Oh, wait, that was Proust. Was he an existentialist? I've forgotten...

This column is Copyright 2015 American City Business Journals. All rights reserved. Reprinted with permission. is Copyright 2015 by Joe Brancatelli. All rights reserved.